By MH Rajesh
Commencing at the Indonesian Parliament in September 2013 and continuing to Xi’s recent visit to Pakistan, the Silk Route initiative by China has been taking shape. It appears that the details of this initiative continue to be released in bits and pieces. No official maps exist, nor does a clear white paper on what this idea exactly constitute. This has led some to infer that even the Chinese are just giving flesh and blood to that idea and is learning as they go!
A brief look at the semantics of the idea indicates either a lack of congruence or a high loss in translation. Some reports name it the New Silk Road, some call it Maritime Silk Road, while others label it as the One Belt One Road, Silk Road Economic Belt, Belt and Road Initiative. The jury is out on this as to what eventual name the Chinese will settle for this grand idea.
Quite similar was the case with maps. Some showed Gwadar, some didn’t overall graphics as well as name left the field open to interpretation. While it is understandable that an idea as large as this will take some time to demarcate its contours and limits, the open ended nature of this project is hard to miss.
Quick to utilize this omission, several Pakistan sources cited this absence to highlight how the infamous Pakistan-China nexus in South Asia was history and that it was economy that drove strategy henceforth.
President Xi’s visit to Pakistan has revealed a little more about the Silk Route Plans.
What was also not clear was whether China’s rather liberal investments in Pakistan under the China Pakistan Economic Corridor (CPEC) was a part of Silk Route or a stand-alone CEPC investment. Here again, the dichotomy of scale was hard to miss. As per Chinese sources the Silk Route fund constituted $40bn. Over 60 countries were to be affected by the Silk Route. However, a whopping $46bn was what the CPEC investment was touted to be. Therein lay the asymmetry and also the overall plans that China has for the region. One could ask, was the whopping $46bn for CEPC exclusive of the $ 40bn Silk Route?
However we now seem to have some answers from a report in the newspaper China Daily on Xi’s recent visit to Pakistan. Silk Road Fund makes first investment, indicates this article. It further states that
The $40-billion Silk Road Fund, set up in December 2014, will inject capital in China Three Gorges South Asia Investment Ltd, a subsidiary of China Three Gorges Corp, to develop the Karot hydropower project on the Jhelum River in northeastern Pakistan.
The project will be funded through a mix of equity and loan investments, said a statement released on the website of the People’s Bank of China, the central bank.
“The investment structure includes global investors and follows international standards, which means the project is feasible and can achieve mutual benefit and win-win results for partners,” Jin Qi, chairwoman of the Silk Road Fund Co Ltd, told China Daily in an exclusive interview.
This latest ‘fix’ on the Silk Road goes on to say that
With Initial capital of the fund was $10 billion, with 65 percent coming from the nation’s foreign exchange reserves.
“By using the foreign exchange reserves for equity and debt investment purposes, the fund will provide more opportunities for Chinese enterprises going overseas,” he said.
The take-aways according to me are as follows: _
Whist the New Silk Route has captured the imagination of many China watchers as a ‘big idea’, it would be prudent to correlate this idea with actual events on ground, like this debut infusion of Silk Route funds into Pakistan.
It proves that Pakistan is very much a part of the new silk route and not excluded from its ambit as some sources believe.
It indicates that there are overlaps between the silk route funds and the CEPC investments.
However, it still remains a small mystery as to why Pakistan was originally not projected in the Silk route plans and the China chose another vehicle for investments in Pakistan— the CPEC.
It is also interesting to note now in the light of Xi’s visit, that there are overlaps in the CPEC and the Silk Route.
What is also more evident is that the contours of this big idea is only taking shape
Only greater clarity and articulation on the idea from official Chinese sources can allow nations to take a stand on the Idea.
The fact that $46bn is the envisaged investment in Pakistan as against $40bn in the silk route highlights where the real priorities are for China.